CGFO Budgeting & Fiscal Policy Management

Question 1

What is the primary purpose of a government budget?

Accepted Answer

To guide financial planning and resource allocation

Answer

To increase taxes

Answer

To monitor employee performance

Answer

To set interest rates

Question 2

What is a capital budget used for?

Accepted Answer

For long-term investments and capital projects

Answer

For monthly salaries

Answer

For routine office expenses

Answer

For travel reimbursements

Question 3

What is zero-based budgeting?

Accepted Answer

Starting from a zero base and justifying every expense

Answer

Budgeting based on prior year figures

Answer

Eliminating all non-essential expenses

Answer

Only using revenue from taxes

Question 4

Which document typically initiates the budgeting process?

Accepted Answer

Budget call or instructions

Answer

Audit report

Answer

Financial statement

Answer

Treasury bond report

Question 5

Why is performance-based budgeting important?

Accepted Answer

It connects funding decisions to program results

Answer

It increases administrative burden

Answer

It discourages innovation

Answer

It favors the largest departments

Question 6

What is the role of the fiscal policy?

Accepted Answer

To adjust government revenue and spending to impact economic conditions

Answer

To manage foreign trade

Answer

To print more money

Answer

To regulate banks directly

Question 7

What does a budget variance indicate?

Accepted Answer

Difference between planned and actual spending

Answer

Success of marketing

Answer

Employee turnover rate

Answer

Public satisfaction index

Question 8

Which type of fund is primarily used for day-to-day operations?

Accepted Answer

General fund

Answer

Debt service fund

Answer

Capital projects fund

Answer

Pension trust fund

Question 9

What is a structural budget deficit?

Accepted Answer

An ongoing deficit even when the economy is strong

Answer

A one-time shortfall due to emergencies

Answer

A temporary imbalance from timing differences

Answer

Surplus from unspent budget